Chinese Inflation Nears 5%

But the news for the Chinese may be more problematic than the rollup number would seem to suggest: Food stuffs rose an ominous 10.3 percent.

Food prices rising 10-plus percent is a troubling sign for a country in which untold millions live on less than $1.25 per day.

(Accurate and current numbers on Chinese poverty are difficult to find, but the World Bank puts the number of Chinese living below $1.25 a day at more than 200 million as recently as 2005.)

As Leslie Hook, reports in today's The Financial Times, this has occurred despite rate hikes by the Chinese central bank: "China has gradually been tightening monetary policy over the past several months by slowing growth in new lending and raising interest ratesthree times since October." (Hook links to her FT colleagues, Patti Waldmeir and Robert Cookson, who report the putative cause: "[PBOC's] big expansion in the money supply to counteract the effects of the global financial crisis".)

But despite an aggressively managed monetary policy, in both directions, the proper balance for the Chinese central bank remains an elusive one, and more policy actions are expected: "Tuesday’s data underscore that those cooling efforts have yet to take effect, and more tightening measures are widely expected in the coming months," Hook reports.

With food prices rising at double digit rates, patience may be in short supply 'in the coming months'.